Exhibit 99.2

 

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SUPPLEMENTAL INFORMATION

 

THIRD QUARTER 2020

 

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701 WESTERN AVENUE | GLENDALE, CA 91201 | 818.244.8080 | PSBUSINESSPARKS.COM


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ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION FOR

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

 

     Page  

Consolidated Balance Sheets

     3  

Consolidated Statements of Income

     5  

Portfolio Summary

     7  

Third Quarter Fact Sheet

     8  

Same Park Cash NOI by Region and Type

     9  

Analysis of Capital Expenditures

     11  

Funds from Operations (FFO), Core FFO and Funds Available for Distribution (FAD)

     12  

Capital Structure and Financial Condition

     14  

Portfolio Operating Analysis and Statistics

     15  

Lease Expirations

     22  

Third Quarter- and Year-to-Date Production Statistics

     26  

Definitions and Non-GAAP Disclosures

     27  

Forward-Looking Statements

When used within this supplemental information package, the words “may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends,” and similar expressions are intended to identify “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements. Such factors include the duration and severity of the COVID-19 pandemic and its impact on our business and our customers; the impact of competition from new and existing commercial facilities which could impact rents and occupancy levels at the Company’s facilities; the Company’s ability to evaluate, finance, and integrate acquired and developed properties into the Company’s existing operations; the Company’s ability to effectively compete in the markets that it does business in; the impact of the regulatory environment as well as national, state, and local laws and regulations including, without limitation, those governing REITs; the impact of general economic and business conditions, including as a result of the economic fallout of the COVID-19 pandemic; rental rates and occupancy levels at the Company’s facilities; and changes in these conditions as a result of the COVID-19 pandemic, the availability of permanent capital at attractive rates, the outlook and actions of rating agencies and risks detailed from time to time in the Company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K, and annual reports on Form 10-K.

 

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         September 30, 2020              December 31, 2019            

ASSETS

       
       

Cash and cash equivalents

   $ 117,881     $ 62,786       (a)  
       

Real estate facilities, at cost

       

Land

     855,542       844,419   

Buildings and improvements

     2,213,798       2,203,308   
  

 

 

    

 

 

   
     3,069,340       3,047,727   

Accumulated depreciation

     (1,210,473)        (1,158,489)    
  

 

 

    

 

 

   
     1,858,867       1,889,238        (b)  

Properties held for sale, net (1)

            15,264   

Land and building held for development, net

     35,506       28,110   
  

 

 

    

 

 

   
     1,894,373       1,932,612   
       

Rent receivable

     1,790       1,392        (c)  

Deferred rent receivable (2)

     37,361      32,993   

Other assets

     13,348       16,660        (d)  
  

 

 

    

 

 

   

Total assets

   $ 2,064,753     $ 2,046,443   
  

 

 

    

 

 

   
       

LIABILITIES AND EQUITY

       
       

Accrued and other liabilities

   $ 87,808     $ 84,632        (e)  
  

 

 

    

 

 

   

Total liabilities

     87,808       84,632   
       

Equity

       

PS Business Parks, Inc.’s shareholders’ equity:

       

Preferred stock

     944,750       944,750   

Common stock

     274       274   

Paid-in capital

     737,065       736,986        (f)  

Accumulated earnings

     75,393       63,666        (g)  
  

 

 

    

 

 

   

Total PS Business Parks, Inc.’s shareholders’ equity

     1,757,482       1,745,676   

Noncontrolling interests

     219,463       216,135   
  

 

 

    

 

 

   

Total equity

     1,976,945       1,961,811   
  

 

 

    

 

 

   

Total liabilities and equity

   $ 2,064,753     $ 2,046,443   
  

 

 

    

 

 

   

 

 

See following page for additional detail related to the tickmarks shown in the table above.

 

(1)

On September 16, 2020, the Company completed the sale of two industrial buildings totaling 40,000 square feet located in Redmond, Washington, which were subject to an eminent domain process, for a gross sales price of $11.4 million. Properties held for sale, net as of December 31, 2019 represents the same two industrial buildings mentioned above along with one single-tenant building totaling 113,000 square feet located in Montgomery County, Maryland, which sold on January 7, 2020 for a gross sales price of $30.0 million.

(2)

Increase in deferred rent receivable is primarily attributable to rent deferral arrangements that the Company entered into with certain customers as a result of the COVID-19 pandemic.

 

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(a)

  

Change in cash and cash equivalents

      
  

Beginning cash balance at December 31, 2019

       $ 62,786 
  

Net cash provided by operating activities

         211,557 
  

Net cash used in investing activities

         (6,540)  
  

Net cash used in financing activities

         (149,922)  
         

 

 

 
  

Ending cash balance at September 30, 2020

       $ 117,881 
         

 

 

 
         

(b)

  

Change in real estate facilities, at cost

      
  

Beginning balance at December 31, 2019

       $ 1,889,238 
  

Acquisition of real estate

         13,276 
  

Recurring capital improvements

         6,413 
  

Tenant improvements, gross

         11,208 
  

Capitalized lease commissions

         5,225 
  

Nonrecurring capital improvements

         512 
  

Depreciation and amortization of real estate facilities

         (67,035)  
  

Transfer to properties held for sale

         30 
         

 

 

 
  

Ending balance at September 30, 2020

       $ 1,858,867 
         

 

 

 
         
         
                      Increase  
(c)    Change in rent receivable     September 30, 2020         December 31, 2019        (Decrease)  
  

Non-government customers

  $ 1,079   $ 597    $ 482 
  

U.S. Government customers

    711     795      (84)  
    

 

 

   

 

 

    

 

 

 
     $ 1,790   $ 1,392    $ 398 
    

 

 

   

 

 

    

 

 

 
                      Increase  
(d)    Change in other assets   September 30, 2020     December 31, 2019      (Decrease)  
  

Lease intangible assets, net

  $ 7,181   $ 9,973    $ (2,792)  
  

Prepaid property taxes and insurance

    4,379     2,572      1,807 
  

Other

    1,788     4,115      (2,327)  
    

 

 

   

 

 

    

 

 

 
     $ 13,348   $ 16,660    $ (3,312)  
    

 

 

   

 

 

    

 

 

 
                      Increase  
(e)    Change in accrued and other liabilities   September 30, 2020     December 31, 2019      (Decrease)  
  

Customer security deposits

  $ 37,999   $ 39,118    $ (1,119)  
  

Accrued property taxes

    22,018     11,521      10,497 
  

Customer prepaid rent

    11,862     14,519      (2,657)  
  

Lease intangible liabilities, net

    6,298     8,541      (2,243)  
  

Other

    9,631     10,933      (1,302)  
    

 

 

   

 

 

    

 

 

 
     $ 87,808   $ 84,632    $ 3,176 
    

 

 

   

 

 

    

 

 

 
         

(f)

  

Change in paid-in capital

      
  

Beginning paid-in capital at December 31, 2019

       $ 736,986 
  

Exercise of stock options

         259 
  

Stock compensation expense, net

         3,922 
  

Cash paid for taxes in lieu of shares upon vesting of restricted stock units

         (4,102)  
         

 

 

 
  

Ending paid-in capital at September 30, 2020

       $ 737,065 
         

 

 

 
         

(g)

  

Change in accumulated earnings

      
  

Beginning accumulated earnings at December 31, 2019

       $ 63,666 
  

Net income

         134,399 
  

Distributions to preferred shareholders

         (36,139)  
  

Distributions to common shareholders

         (86,533)  
         

 

 

 
  

Ending accumulated earnings at September 30, 2020

       $ 75,393 
         

 

 

 

 

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     For The Three Months      For the Nine Months Ended
     Ended September 30,      Ended September 30,
     2020      2019      2020      2019      
             

Rental income

   $ 103,760     $ 108,064     $ 310,535     $ 323,671    (a)
             

Expenses:

             

Cost of operations

     32,096       32,468       93,490       97,521    (b)

Depreciation and amortization

     23,064       26,220       72,646       75,863   

General and administrative

     5,047       4,051       11,374       10,111    (c)
  

 

 

    

 

 

    

 

 

    

 

 

   

Total operating expenses

     60,207       62,739       177,510       183,495   
  

 

 

    

 

 

    

 

 

    

 

 

   
             

Interest and other income

     230       1,384       1,012       2,766    (d)

Interest and other expense

     (536)        (199)        (900)        (484)     (e)

Gain on sale of real estate facility

     7,652              27,273          
  

 

 

    

 

 

    

 

 

    

 

 

   

Net income

     50,899       46,510       160,410       142,458   

Allocation to noncontrolling interests

     (8,124)        (7,020)        (26,011)        (21,670)    
  

 

 

    

 

 

    

 

 

    

 

 

   

Net income allocable to PS Business Parks, Inc.

     42,775       39,490       134,399       120,788   

Allocation to preferred shareholders

     (12,046)        (12,959)        (36,139)        (38,877)    

Allocation to restricted stock unit holders

     (149)        (219)        (543)        (699)    
  

 

 

    

 

 

    

 

 

    

 

 

   

Net income allocable to common shareholders

   $ 30,580     $ 26,312     $ 97,717     $ 81,212   
  

 

 

    

 

 

    

 

 

    

 

 

   
             

Net income per common share

             

Basic

   $ 1.11     $ 0.96     $ 3.56     $ 2.96   

Diluted

   $ 1.11     $ 0.96     $ 3.55     $ 2.95   
             

Weighted average common shares outstanding

             

Basic

     27,483       27,432       27,470       27,411   

Diluted

     27,565       27,543       27,560       27,512   

 

 

See following page for additional detail related to the tickmarks shown in the table above.

 

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        For The Three Months Ended     Increase     For the Nine Months Ended     Increase  
(a)   Rental income:     September 30, 2020         September 30, 2019           (Decrease)           September 30, 2020         September 30, 2019           (Decrease)      
 

Same Park (1) (2)

  $ 95,096   $ 94,388   $ 708   $ 282,171   $ 282,644   $ (473)  
 

Same Park non-cash rental income (1) (3)

    1,303     749     554     4,620     1,891     2,729
 

Non-Same Park (1) (2)

    4,767     3,340     1,427     15,093     8,853     6,240
 

Non-Same Park non-cash rental income (1) (3)

    226     258     (32)       716     655     61
 

Multifamily

    2,201     2,519     (318)       7,249     7,492     (243)  
 

Rental income from assets sold (4)

    167     6,810     (6,643)       686     22,136     (21,450)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 103,760   $ 108,064   $ (4,304)     $ 310,535   $ 323,671   $ (13,136)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
        For The Three Months Ended     Increase     For the Nine Months Ended     Increase  
(b)   Cost of operations:   September 30, 2020     September 30, 2019     (Decrease)     September 30, 2020     September 30, 2019     (Decrease)  
 

Same Park (1)

  $ 28,903   $ 27,452   $ 1,451   $ 84,034   $ 82,278   $ 1,756
 

Same Park non-cash expense (1) (5)

    227     277     (50)       730     817     (87)  
 

Non-Same Park (1)

    1,843     1,137     706     5,446     3,304     2,142
 

Non-Same Park non-cash expense (1) (5)

    16     15     1     53     41     12
 

Multifamily

    1,066     1,045     21     3,084     3,118     (34)  
 

Expenses from assets sold (4)

    41     2,542     (2,501)       143     7,963     (7,820)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 32,096   $  32,468   $ (372)     $  93,490   $  97,521   $ (4,031)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
        For The Three Months Ended     Increase     For the Nine Months Ended     Increase  
(c)   General and administrative expenses:   September 30, 2020     September 30, 2019     (Decrease)     September 30, 2020     September 30, 2019     (Decrease)  
 

Compensation expense

  $ 1,431   $ 1,333   $ 98   $ 4,608   $ 4,294   $ 314
 

Stock compensation expense

    2,275     1,793     482     3,608     3,081     527
 

Professional fees and other

    1,341     925     416     3,158     2,736     422
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 5,047   $ 4,051   $ 996   $ 11,374   $ 10,111   $ 1,263
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
        For The Three Months Ended     Increase     For the Nine Months Ended     Increase  
(d)   Interest and other income:   September 30, 2020     September 30, 2019     (Decrease)     September 30, 2020     September 30, 2019     (Decrease)  
 

Management fee income

  $ 65   $ 71   $ (6)     $ 198   $ 221   $ (23)  
 

Interest income

    20     175     (155)       365     817     (452)  
 

Other income

    145     1,138     (993)       449     1,728     (1,279)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 230   $ 1,384   $ (1,154)     $ 1,012   $ 2,766   $ (1,754)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
        For The Three Months Ended     Increase     For the Nine Months Ended     Increase  
(e)   Interest and other expense:   September 30, 2020     September 30, 2019     (Decrease)     September 30, 2020     September 30, 2019     (Decrease)  
 

Interest expense

  $ -     $ (47)     $ 47   $ -     $ (47)     $ 47
 

Credit facilities fees & other charges

    (536)       (152)       (384)       (900)       (437)       (463)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    $ (536)     $ (199)     $ (337)     $ (900)     $ (484)     $ (416)  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

 

(1)

Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park and Non-Same Park.

(2)

Same Park rental income is presented net of (a) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (b) rent deferrals and abatements of $2.0 million and $0 for the three months ended September 30, 2020 and 2019, respectively, and $6.5 million and $0 for the nine months ended September 30, 2020 and 2019, respectively. Non-Same Park rental income is presented net of (a) accounts receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively, and (b) rent deferrals and abatements of $0.1 million and $0 for the three months ended September 30, 2020 and 2019, respectively, and $0.2 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

(3)

Non-cash rental income represents amortization of deferred rent receivable, amortization of above and below market rents, net, and amortization of lease incentives and tenant improvement reimbursements. Same Park non-cash rental income is presented net of deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively. Non-Same Park non-cash rental income is presented net of deferred rent receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

(4)

Amounts for the three months ended September 30, 2020 include results related to two industrial buildings totaling 40,000 square feet sold in September 2020; amounts for the nine months ended September 30, 2020 include the two industrial buildings totaling 40,000 square feet sold in September 2020 and a 113,000 square foot office building sold in January 2020; amounts for the three and nine months ended September 30, 2019 reflect the operating results of the two industrial buildings totaling 40,000 square feet sold in September 2020, the 113,000 square foot office building sold in January 2020, and 1.3 million square feet of assets sold in October 2019.

(5)

Non-cash expense represents stock compensation expense attributable to employees whose compensation expense is recorded in costs of operations.

 

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PROPERTY INFORMATION (1)

 

      For The Three Months Ended September 30,               For the Nine Months Ended September 30,           
     2020      2019      % Change      2020      2019      % Change  

Total Portfolio (2)

                 

Total rentable square footage at period end

     27,482,000        27,330,000        0.6%        27,482,000        27,330,000        0.6%  

Weighted average occupancy

     91.2%        94.4%        (3.4%)        91.9%        94.1%        (2.3%)  

Period end occupancy

     91.3%        94.4%        (3.3%)        91.3%        94.4%        (3.3%)  

Revenue per occupied sq. ft. (3) (4)

   $ 16.17      $ 15.52        4.2%      $ 15.97      $ 15.54        2.8%  

RevPAF (3) (4)

   $ 14.76      $ 14.66        0.7%      $ 14.68      $ 14.62        0.4%  
                 

Same Park Portfolio (3)

                 

Total rentable square footage at period end

     25,656,000        25,656,000        -        25,656,000        25,656,000        -  

Weighted average occupancy

     92.3%        94.7%        (2.5%)        92.5%        94.5%        (2.1%)  

Period end occupancy

     92.3%        94.5%        (2.3%)        92.3%        94.5%        (2.3%)  

Revenue per occupied sq. ft. (3) (5)

   $ 16.29      $ 15.66        4.0%      $ 16.11      $ 15.64        3.0%  

RevPAF (3) (5)

   $ 15.03      $ 14.83        1.3%      $ 14.90      $ 14.79        0.7%  
                 

Non-Same Park Portfolio (3)

                 

Total rentable square footage at period end

     1,826,000        1,674,000        9.1%        1,826,000        1,674,000        9.1%  

Weighted average occupancy

     76.9%        89.5%        (14.1%)        83.9%        83.8%        0.1%  

Period end occupancy

     77.7%        93.3%        (16.7%)        77.7%        93.3%        (16.7%)  

Revenue per occupied sq. ft. (3) (6)

   $ 14.22      $ 12.51        13.7%        13.77        13.11        5.0%  

RevPAF (3) (6)

   $ 10.93      $ 11.21        (2.5%)        11.55        10.99        5.1%  
                 

Multifamily Portfolio

                 

Number of units

     395        395        -        395        395        -  

Weighted average occupancy

     91.1%        95.6%        (4.7%)        92.6%        95.3%        (2.9%)  

Period end occupancy

     94.4%        94.7%        (0.3%)        94.4%        94.7%        (0.3%)  

 

 

 

(1)

Excludes assets sold for the periods shown.

 

(2)

Operating metrics from our multifamily asset are excluded from total portfolio operating metrics.

 

(3)

Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Revenue per Occupied Square Foot, RevPAF, Same Park and Non-Same Park.

(4)

Included in the calculation of Total Park revenue per occupied square foot and RevPAF is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.3 million for both the three months ended September 30, 2020 and 2019, and $1.5 million and $0.9 million for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.7 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

(5)

Included in the calculation of Same Park revenue per occupied square foot and RevPAF is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

(6)

Included in the calculation of Non-Same Park revenue per occupied square foot and RevPAF is (a) lease buyout income of $0 for both the three and nine months ended September 30, 2020 and 2019, (b) accounts receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0 for both the three months ended September 30, 2020 and 2019, and $0.1 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

 

7


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NET OPERATING INCOME

 

 

       For The Three Months Ended September 30,                 For the Nine Months Ended September 30,           
     2020      2019      % Change      2020      2019      % Change  

Rental income

                 

Same Park (1) (2) (3)

   $ 96,399      $ 95,137        1.3%      $ 286,791      $ 284,535        0.8%  

Non-Same Park (1)

     4,993        3,598        38.8%        15,809        9,508        66.3%  

Multifamily

     2,201        2,519        (12.6%)        7,249        7,492        (3.2%)  

Assets sold

     167        6,810        (97.5%)        686        22,136        (96.9%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Total rental income

     103,760        108,064        (4.0%)        310,535        323,671        (4.1%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Adjusted cost of operations (1) (5)

                 

Same Park (1) (6)

     28,903        27,452        5.3%        84,034        82,278        2.1%  

Non-Same Park (1)

     1,843        1,137        62.1%        5,446        3,304        64.8%  

Multifamily

     1,066        1,045        2.0%        3,084        3,118        (1.1%)  

Assets sold

     41        2,525        (98.4%)        143        7,911        (98.2%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Total

     31,853        32,159        (1.0%)        92,707        96,611        (4.0%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Net operating income

                 

Same Park (1)

     67,496        67,685        (0.3%)        202,757        202,257        0.2%  

Non-Same Park (1)

     3,150        2,461        28.0%        10,363        6,204        67.0%  

Multifamily

     1,135        1,474        (23.0%)        4,165        4,374        (4.8%)  

Assets sold

     126        4,285        (97.1%)        543        14,225        (96.2%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Total net operating income

   $ 71,907      $ 75,905        (5.3%)      $ 217,828      $ 227,060        (4.1%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

CASH NET OPERATING INCOME

 

     For The Three Months Ended September 30,             For the Nine Months Ended September 30,         
     2020      2019      % Change      2020      2019      % Change  

Cash rental income (1) (5)

                 

Same Park (1) (2) (4)

   $ 95,096      $ 94,388        0.8%      $ 282,171      $ 282,644        (0.2%)  

Non-Same Park (1)

     4,767        3,340        42.7%        15,093        8,853        70.5%  

Multifamily

     2,200        2,518        (12.6%)        7,245        7,488        (3.2%)  

Assets sold

     167        6,696        (97.5%)        686        21,618        (96.8%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Total cash rental income

     102,230        106,942        (4.4%)        305,195        320,603        (4.8%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Adjusted cost of operations (1) (5)

                 

Same Park (1) (6)

     28,903        27,452        5.3%        84,034        82,278        2.1%  

Non-Same Park (1)

     1,843        1,137        62.1%        5,446        3,304        64.8%  

Multifamily

     1,066        1,045        2.0%        3,084        3,118        (1.1%)  

Assets sold

     41        2,525        (98.4%)        143        7,911        (98.2%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Total adjusted cost of operations

     31,853        32,159        (1.0%)        92,707        96,611        (4.0%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Cash net operating income

                 

Same Park (1)

     66,193        66,936        (1.1%)        198,137        200,366        (1.1%)  

Non-Same Park (1)

     2,924        2,203        32.7%        9,647        5,549        73.9%  

Multifamily

     1,134        1,473        (23.0%)        4,161        4,370        (4.8%)  

Assets sold

     126        4,171        (97.0%)        543        13,707        (96.0%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

Total cash net operating income

   $ 70,377      $ 74,783        (5.9%)      $ 212,488      $ 223,992        (5.1%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) (1)

 

     For The Three Months Ended September 30,             For the Nine Months Ended September 30,         
     2020      2019      % Change      2020      2019      % Change  

Net income

   $ 50,899      $ 46,510        9.4%      $ 160,410      $ 142,458        12.6%  

Net interest (income) expense

     117        8        1362.5%        45        (362)        112.4%  

Depreciation and amortization

     23,064        26,220        (12.0%)        72,646        75,863        (4.2%)  

Gain on sale of real estate facilities and development rights

     (7,652)        -        100.0%        (27,273)        -        100.0%  
  

 

 

    

 

 

       

 

 

    

 

 

    

EBITDAre

   $ 66,428      $ 72,738        (8.7%)      $ 205,828      $ 217,959        (5.6%)  
  

 

 

    

 

 

       

 

 

    

 

 

    

 

(1)

Refer to page 27, Definition and Non-GAAP Disclosures, for the definitions of Same Park, Non-Same Park, Cash Rental Income, Adjusted Cost of Operations, and EBITDAre.

(2)

Same Park rental income and cash rental income include lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively.

(3)

Same Park rental income is presented net of (a) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (b) deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

(4)

Same Park cash rental income is presented net of (a) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (b) rent deferrals and abatements of $2.0 million and $0 for the three months ended September 30, 2020 and 2019, respectively, and $6.5 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

(5)

Refer to page 6 for a reconciliation of cash rental income to rental income and adjusted cost of operations to cost of operations as reported on our GAAP statements of income.

(6)

The table below details Same Park adjusted cost of operations:

 

       For The Three Months Ended September 30,                For the Nine Months Ended September 30,           
     2020      2019      % Change     2020      2019      % Change  

Cost of operations

                

Property taxes

   $ 10,811      $ 10,224        5.7   $ 32,410      $ 30,416        6.6

Utilities

     4,870        5,249        (7.2 %)      14,106        14,610        (3.4 %) 

Repairs and maintenance

     6,197        5,844        6.0     17,277        17,394        (0.7 %) 

Payroll

     4,090        3,622        12.9     12,030        11,070        8.7

Snow removal

     -        -        -       78        1,033        (92.4 %) 

Property insurance

     1,283        868        47.8     3,009        2,346        28.3

Other expenses

     1,652        1,645        0.4     5,124        5,409        (5.3 %) 
  

 

 

    

 

 

      

 

 

    

 

 

    

Total cost of operations

   $ 28,903      $ 27,452        5.3   $ 84,034      $ 82,278        2.1
  

 

 

    

 

 

      

 

 

    

 

 

    

 

8


LOGO

 

     For the Three Months Ended  
     September 30, 2020      September 30, 2019      Total
% Change
 
       Industrial            Flex              Office              Total              Industrial              Flex              Office              Total      

Cash rental income (1) (2)

                          

Northern California

   $ 21,170       $ 2,291       $ 3,071       $ 26,532       $ 20,648       $ 2,519       $ 3,058       $ 26,225         1.2

Southern California

     8,859         4,643         203         13,705         8,704         4,844         205         13,753         (0.3 %) 

Dallas

     2,947         5,329                8,276         3,057         5,296                8,353         (0.9 %) 

Austin

     2,077         6,190                8,267         2,122         5,552                7,674         7.7

Northern Virginia

     1,862          6,150         9,671         17,683         1,756         6,360         10,123         18,239         (3.0 %) 

South Florida

     10,445         426         42         10,913         10,334         497         45         10,876         0.3

Seattle

     2,956         1,785         128         4,869         2,581         1,567         185         4,333         12.4

Suburban Maryland

     1,042                3,809         4,851         1,071                3,864         4,935         (1.7 %) 

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total

     51,358         26,814         16,924         95,096         50,273         26,635         17,480         94,388         0.8

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Adjusted cost of operations (1)

                          

Northern California

     5,046         648         794         6,488         4,839         666         832         6,337         2.4

Southern California

     2,501         1,336         91         3,928         2,215         1,341         76         3,632         8.1

Dallas

     1,024         1,835                2,859         933         2,047                2,980         (4.1 %) 

Austin

     787         2,333                3,120         713         2,131                2,844         9.7

Northern Virginia

     513         1,898         3,596         6,007         493         1,823         3,628         5,944         1.1

South Florida

     3,143         154         20         3,317         2,734         158         22         2,914         13.8

Seattle

     868         424         66         1,358         616         370         50         1,036         31.1

Suburban Maryland

     363                1,463         1,826         370                1,395         1,765         3.5

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total

     14,245         8,628         6,030         28,903         12,913         8,536         6,003         27,452         5.3

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Cash NOI (1)

                          

Northern California

     16,124         1,643         2,277         20,044         15,809         1,853         2,226         19,888         0.8

Southern California

     6,358         3,307         112         9,777         6,489         3,503         129         10,121         (3.4 %) 

Dallas

     1,923         3,494                5,417         2,124         3,249                5,373         0.8

Austin

     1,290         3,857                5,147         1,409         3,421                4,830         6.6

Northern Virginia

     1,349         4,252         6,075         11,676         1,263         4,537         6,495         12,295         (5.0 %) 

South Florida

     7,302         272         22         7,596         7,600         339         23         7,962         (4.6 %) 

Seattle

     2,088         1,361         62         3,511         1,965         1,197         135         3,297         6.5

Suburban Maryland

     679                2,346         3,025         701                2,469         3,170         (4.6 %) 

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total

   $     37,113       $     18,186       $     10,894       $     66,193       $     37,360       $     18,099       $     11,477       $     66,936         (1.1 %) 

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(1)

Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park, Cash Rental Income, Adjusted Cost of Operations, and Cash NOI.

(2)

Included in the calculation of Cash rental income is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively. Cash rental income does not include deferred or abated rental income, which totaled $2.0 million and $0 for the three months ended September 30, 2020 and 2019, respectively.

 

9


LOGO

 

     For the Nine Months Ended  
     September 30, 2020      September 30, 2019      Total
% Change
 
       Industrial            Flex              Office              Total            Industrial            Flex              Office             Total      

Cash rental income (1) (2)

                         

Northern California

   $ 62,515       $ 6,967       $ 9,251       $ 78,733       $ 62,481       $ 7,414       $ 9,016      $ 78,911         (0.2 %) 

Southern California

     25,573         13,887         591         40,051         26,188         14,130         573        40,891         (2.1 %) 

Dallas

     8,809         16,012                24,821         9,253         15,868               25,121         (1.2 %) 

Austin

     6,062         18,231                24,293         6,303         16,549               22,852         6.3

Northern Virginia

     5,549         18,073         29,030         52,652         5,300         18,888         30,942        55,130         (4.5 %) 

South Florida

     30,832         1,373         99         32,304         30,944         1,423         71        32,438         (0.4 %) 

Seattle

     8,776         5,136         475         14,387         7,514         4,697         548        12,759         12.8

Suburban Maryland

     3,067                11,863         14,930         3,373                11,169        14,542         2.7

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

Total

     151,183         79,679         51,309         282,171         151,356         78,969         52,319        282,644         (0.2 %) 

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

Adjusted cost of operations (1)

                         

Northern California

     14,382         1,986         2,338         18,706         13,811         1,976         2,380        18,167         3.0

Southern California

     6,898         3,858         246         11,002         6,652         3,796         221        10,669         3.1

Dallas

     3,013         6,087                9,100         2,830         5,988               8,818         3.2

Austin

     2,268         6,774                9,042         2,153         6,301               8,454         7.0

Northern Virginia

     1,548         5,550         10,873         17,971         1,572         5,550         11,808        18,930         (5.1 %) 

South Florida

     8,806         412         51         9,269         8,264         454         81        8,799         5.3

Seattle

     2,412         1,225         169         3,806         1,785         1,126         149        3,060         24.4

Suburban Maryland

     1,032                4,106         5,138         1,070                4,311        5,381         (4.5 %) 

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

Total

     40,359         25,892         17,783         84,034         38,137         25,191         18,950        82,278         2.1

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

Cash NOI (1)

                         

Northern California

     48,133         4,981         6,913         60,027         48,670         5,438         6,636        60,744         (1.2 %) 

Southern California

     18,675         10,029         345         29,049         19,536         10,334         352        30,222         (3.9 %) 

Dallas

     5,796         9,925                15,721         6,423         9,880               16,303         (3.6 %) 

Austin

     3,794         11,457                15,251         4,150         10,248               14,398         5.9

Northern Virginia

     4,001         12,523         18,157         34,681         3,728         13,338         19,134        36,200         (4.2 %) 

South Florida

     22,026         961         48         23,035         22,680         969         (10 )       23,639         (2.6 %) 

Seattle

     6,364         3,911         306         10,581         5,729         3,571         399        9,699         9.1

Suburban Maryland

     2,035                7,757         9,792         2,303                6,858        9,161         6.9

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

Total

   $     110,824       $     53,787       $     33,526       $     198,137       $     113,219       $     53,778       $     33,369      $     200,366         (1.1 %) 

 

  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

(1)

Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park, Cash Rental Income, Adjusted Cost of Operations, and Cash NOI.

(2)

Included in the calculation of Cash rental income is (a) lease buyout income of $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively. Cash rental income does not include deferred or abated rental income, which totaled $6.5 million and $0 for the nine months ended September 30, 2020 and 2019, respectively.

 

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     For the Nine Months Ended September 30,  
     2020     2019  

Commercial recurring capital expenditures (1)

    

Same Park

    

Capital improvements

   $ 6,389     $ 5,899  

Tenant improvements

     10,632       10,330  

Lease commissions

     4,939       5,430  
  

 

 

   

 

 

 

Total Same Park recurring capital expenditures

     21,960       21,659  

Non-Same Park

    

Capital improvements

     24       60  

Tenant improvements

     391       1,369  

Lease commissions

     286       340  
  

 

 

   

 

 

 

Total Non-Same Park recurring capital expenditures

     701       1,769  
  

 

 

   

 

 

 

Total recurring capital expenditures

     22,661       23,428  

Assets sold recurring capital expenditures

     16       813  
  

 

 

   

 

 

 

Total commercial recurring capital expenditures

     22,677       24,241  

Non-recurring property renovations (1)

     512       2,011  

Multifamily capital expenditures

     —         20
  

 

 

   

 

 

 

Total capital expenditures

   $ 23,189     $ 26,272  
  

 

 

   

 

 

 
    

Same Park recurring capital expenditures as a percentage of NOI

     10.8     10.7

 

 

 

(1)

Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Recurring Capital Expenditures and Non-recurring Property Renovations.

 

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     For the Three Months Ended      For the Nine Months Ended  
     September 30,      September 30,  
     2020      2019      2020      2019  

Net income allocable to common shareholders

   $ 30,580     $ 26,312     $ 97,717     $ 81,212 

Adjustments

           

Gain on sale of real estate facilities

     (7,652)               (27,273)         

Depreciation and amortization

     23,064       26,220       72,646       75,863 

Net income allocable to noncontrolling interests

     8,124       7,020       26,011       21,670 

Net income allocable to restricted stock unit holders

     149       219       543       699 

FFO allocated to joint venture partner

     (21)        (39)        (102)        (105)  
  

 

 

    

 

 

    

 

 

    

 

 

 

FFO allocable to diluted common shares and units (1)

     54,244       59,732       169,542       179,339 

Non-capitalizable demolition costs

     335              335        

Acceleration of stock compensation expense due to President and Chief Executive Officer retirement

     1,687              1,687        
  

 

 

    

 

 

    

 

 

    

 

 

 

Core FFO allocable to diluted common shares and units (1)

     56,266       59,732       171,564       179,339 
           

Adjustments

           

Recurring capital improvements

     (1,625)        (2,567)        (6,413)        (5,979)  

Tenant improvements

     (3,338)        (3,238)        (11,023)        (11,699)  

Capitalized lease commissions

     (1,889)        (2,626)        (5,225)        (5,770)  

Total recurring capital expenditures for assets sold

            (282)        (16)        (813)  

Non-cash rental income (2)

     (1,530)        (1,122)        (5,340)        (3,069)  

Non-cash stock compensation expense (3)

     831       2,102       2,704       3,991 

Cash paid for taxes in lieu of shares upon vesting of restricted stock units

     (442)        (620)        (4,102)        (6,120)  
  

 

 

    

 

 

    

 

 

    

 

 

 

FAD allocable to diluted common shares and units (1)

     48,273       51,379       142,149       149,880 

Distributions to common shareholders

     (28,860)        (28,805)        (86,533)        (86,343)  

Distributions to noncontrolling interests - common units

     (7,671)        (7,671)        (23,012)        (23,012)  

Distributions to restricted stock unit holders

     (140)        (219)        (469)        (699)  

Distributions to noncontrolling interests - joint venture

     (46)        (33)        (109)        (78)  
  

 

 

    

 

 

    

 

 

    

 

 

 

Free cash available after fixed charges

     11,556       14,651       32,026       39,748 

Non-recurring property renovations (1)

     (299)        (56)        (512)        (2,011)  

Investment in multifamily development

     (2,971)        (1,597)        (5,094)        (2,590)  

Investment in industrial development

     (2,971)        (283)        (5,843)        (283)  
  

 

 

    

 

 

    

 

 

    

 

 

 

Retained cash (1)

   $ 5,315     $ 12,715     $ 20,577     $ 34,864 
  

 

 

    

 

 

    

 

 

    

 

 

 
           

Weighted average outstanding

           

Common shares

     27,483       27,432       27,470       27,411 

Operating partnership units

     7,305       7,305       7,305       7,305 

Restricted stock units

     49       113       65       126 

Common share equivalents

     82       111       90       101 
  

 

 

    

 

 

    

 

 

    

 

 

 

Total diluted common shares and units

     34,919       34,961       34,930       34,943 
  

 

 

    

 

 

    

 

 

    

 

 

 
           

FFO per share

   $ 1.55     $ 1.71     $ 4.85     $ 5.13 

Core FFO per share

   $ 1.61     $ 1.71     $ 4.91     $ 5.13 

FAD distribution payout ratio (4)

     76.1%        71.5%        77.5%        73.5%  

 

 

 

(1)

Refer to page 27, Definitions and Non-GAAP Disclosures, for the definition of FFO, Core FFO, FAD, Non-Recurring Property Renovations and Retained Cash.

(2)

Non-cash rental income includes amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursement, and lease incentive intangible.

(3)

Amounts shown are net of accelerated stock compensation expense related to the President and Chief Executive Officer retirement, which is also excluded from the computation of Core FFO.

(4)

FAD distribution payout ratio is equal to total distributions to common shareholders, unit holders, restricted stock unit holders and our joint venture partner divided by FAD during the same reporting period.

 

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     As of September 30, 2020             As of December 31, 2019  
            % of Total                           % of Total         
            Market      WTD Average                    Market      WTD Average  
             Total              Capitalization              Rate                             Total              Capitalization              Rate          
                    

Unsecured Debt:

                    

$250.0 million unsecured credit facility (LIBOR + 0.825%)

   $                       $                
  

 

 

             

 

 

       

Total unsecured debt

   $                       $                
  

 

 

             

 

 

       
                    

Preferred Equity:

                    

5.200% Series W preferred stock (7,590,000 depositary shares outstanding) callable 10/20/21

   $ 189,750       3.7%            $ 189,750       2.8%     

5.250% Series X preferred stock (9,200,000 depositary shares outstanding) callable 9/21/22

     230,000       4.4%              230,000       3.5%     

5.200% Series Y preferred stock (8,000,000 depositary shares outstanding) callable 12/7/22

     200,000       3.8%              200,000       3.0%     

4.875% Series Z preferred stock (13,000,000 depositary shares outstanding) callable 11/4/24

     325,000       6.3%              325,000       4.9%     
  

 

 

             

 

 

       

Total preferred equity

   $ 944,750         18.2%        5.10%         $ 944,750         14.2%        5.10%  
  

 

 

             

 

 

       
                    
  

 

 

             

 

 

       

Total debt and preferred equity

   $ 944,750         18.2%        5.10%         $ 944,750         14.2%        5.10%  
  

 

 

             

 

 

       
                    

Common stock (27,486,788 and 27,440,953 shares outstanding as of September 30, 2020 and December 31, 2019, respectively) (1)

   $ 3,364,108       64.6%            $ 4,524,190       67.8%     

Common operating partnership units (7,305,355 units outstanding as of September 30, 2020 and December 31,2019) (1)

     894,102       17.2%              1,204,434       18.0%     
  

 

 

             

 

 

       

Total common equity (1)

   $ 4,258,210         81.8%            $ 5,728,624         85.8%     
  

 

 

             

 

 

       
                    

Total market capitalization

   $          5,202,960       100.0%            $          6,673,374       100.0%     
  

 

 

             

 

 

       
     For the nine months ended September 30, 2020             For the year ended December 31, 2019  

Interest expense and related expenses (2)

   $ 410              $ 611       

Preferred distributions

     36,139                54,346       
  

 

 

             

 

 

       

Total fixed charges and preferred distributions

   $ 36,549              $ 54,957       
  

 

 

             

 

 

       
                    

Ratio of EBITDAre to fixed charges and preferred distributions

     5.6x                 5.3x        

Ratio of FFO to total fixed charges and preferred distributions (3)

     5.6x                 5.3x        

Ratio of debt and preferred Equity to EBITDAre (4)

     3.4x                 3.3x        

 

 

(1)

Total common equity is calculated as the total number of common stock and operating partnership units outstanding multiplied by the Company’s closing share price at the end of each respective period shown. Closing share prices on September 30, 2020 and December 31, 2019 were $122.39 and $164.87, respectively.

(2)

Interest expense and related expenses includes facility fees associated with our unsecured credit facility.

(3)

Ratio of FFO to total fixed charges and preferred distributions is calculated by dividing FFO excluding fixed charges and preferred distributions by total fixed charges and preferred distributions.

(4)

Ratio of debt and preferred equity to EBITDAre is calculated as total debt and preferred equity divided by EBITDAre. Ratio of debt and preferred equity to EBITDAre as of September 30, 2020 is calculated using annualized EBITDAre for the nine months ended September 30, 2020.

 

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Industry Concentration as of September 30, 2020 (1)

 

        
                   Percentage of  
                         Total Rental Income        

Business services

           19.6%  

Warehouse, distribution, transportation and logistics

           12.9%  

Computer hardware, software and related services

           11.3%  

Retail, food, and automotive

           9.1%  

Engineering and construction

           8.0%  

Health services

           7.8%  

Government

           6.1%  

Electronics

           3.1%  

Insurance and financial services

           2.7%  

Home furnishings

           2.6%  

Communications

           1.9%  

Aerospace/defense products and services

           1.8%  

Educational services

           1.0%  

Other

           12.1%  
        

 

 

 

Total

           100.0%  
        

 

 

 
        
Top 10 Customers by Total Annual Rental Income as of September 30, 2020

 

        

Customer

   Square
Footage
     Annualized
Rental Income (2)
     Percentage of Total
  Annualized Rental Income  
 
        

US Government

     521,000     $ 13,170       3.2%  

Amazon Inc.

     501,000       6,173       1.5%  

Luminex Corporation

     199,000       4,382       1.1%  

KZ Kitchen Cabinet & Stone

     221,000       3,490       0.8%  

ECS Federal, LLC

     134,000       2,942       0.7%  

Lockheed Martin Corporation

     124,000       2,635       0.6%  

Applied Materials, Inc.

     162,000       2,356       0.6%  

CentralColo, LLC

     96,000       2,356       0.6%  

Carbel, LLC

     236,000       2,213       0.5%  

Costco

     180,000       1,949       0.5%  
  

 

 

    

 

 

    

 

 

 

Total

         2,374,000     $ 41,666       10.1%  
  

 

 

    

 

 

    

 

 

 
        
Tenant Composition as of September 30, 2020

 

        
                   Average Tenant Size  
            Number      (in square feet)  
            of Tenants      Average square footage  

Large Tenant Portfolio (3)

        1,372       12,691 

Small Tenant Portfolio (4)

        3,609       2,140 
     

 

 

    

Total Portfolio

        4,981       5,046 
     

 

 

    

 

 

 

(1)

Industry concentration is categorized based on customers’ Standard Industrial Classification Code.

(2)

For leases expiring within one year, annualized rental income includes only the income to be received under the existing lease from October 1, 2020 through the respective date of expiration.

(3)

Large tenant portfolio consists of properties with average leases greater than or equal to 5,000 square feet.

(4)

Small tenant portfolio consists of properties with average leases less than 5,000 square feet.

 

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Annualized Revenue per Occupied Square Foot (1) (2)

 
     For the Three Months             For the Nine Months Ended       
     Ended September 30,             Ended September 30,       

                    Region

   2020      2019      % Change      2020      2019      % Change

Northern California

    $             16.43     $             15.11      8.7%       $             16.30     $             15.15      7.6

Southern California

    $ 17.73     $ 17.77      (0.2%)       $ 17.42     $ 17.52      (0.6 %) 

Dallas

    $ 13.04     $ 12.81      1.8%       $ 12.98     $ 12.75      1.8

Austin

    $ 17.99     $ 17.14      5.0%       $ 17.79     $ 17.22      3.3

Northern Virginia

    $ 19.66     $ 19.83      (0.9%)       $ 19.66     $ 20.02      (1.8 %) 

South Florida

    $ 12.28     $ 11.90      3.2%       $ 12.04     $ 11.78      2.2

Seattle

    $ 15.34     $ 13.31      15.3%       $ 14.69     $ 13.09      12.2

Suburban Maryland

    $ 19.24     $ 19.34      (0.5%)       $ 19.19     $ 19.39      (1.0 %) 

Total

    $ 16.29     $ 15.66      4.0%       $ 16.11     $ 15.64      3.0

 

Annualized Revenue per Available Foot (RevPAF) (1) (2)

 
     For the Three Months          For the Nine Months Ended       
     Ended September 30,          Ended September 30,       

                    Region

   2020      2019      % Change   2020      2019      % Change

Northern California

    $             15.08     $             14.67      2.8    $             14.90     $             14.61      2.0

Southern California

    $ 16.78     $ 16.89      (0.7 %)     $ 16.53     $ 16.66      (0.8 %) 

Dallas

    $ 11.48     $ 11.73      (2.1 %)     $ 11.60     $ 11.76      (1.4 %) 

Austin

    $ 17.00     $ 15.67      8.5    $ 16.85     $ 15.69      7.4

Northern Virginia

    $ 18.25     $ 18.71      (2.5 %)     $ 18.21     $ 18.88      (3.5 %) 

South Florida

    $ 11.40     $ 11.38      0.2    $ 11.20     $ 11.25      (0.4 %) 

Seattle

    $ 14.40     $ 12.69      13.5    $ 14.21     $ 12.49      13.8

Suburban Maryland

    $ 17.26     $ 17.28      (0.1 %)     $ 17.31     $ 17.27      0.2

Total

    $ 15.03     $ 14.83      1.3    $ 14.90     $ 14.79      0.7

 

Annualized Revenue per Occupied Square Foot (1) (2)

 
     For the Three Months          For the Nine Months Ended       
     Ended September 30,          Ended September 30,       

                    Product Type

   2020      2019      % Change   2020      2019      % Change

Industrial

    $             13.78     $             12.95      6.4    $             13.55     $             12.93      4.8

Flex

    $ 19.10     $ 18.74      1.9    $ 18.98     $ 18.63      1.9

Office

    $ 24.12     $ 24.43      (1.3 %)     $ 24.05     $ 24.58      (2.2 %) 

Total

    $ 16.29     $ 15.66      4.0    $ 16.11     $ 15.64      3.0

 

Annualized Revenue per Available Foot (RevPAF) (1) (2)

 
     For the Three Months          For the Nine Months Ended       
     Ended September 30,          Ended September 30,       

                    Product Type

   2020      2019      % Change   2020      2019      % Change

Industrial

    $             12.77     $             12.41      2.9    $             12.57     $             12.38      1.5

Flex

    $ 17.59     $ 17.43      0.9    $ 17.52     $ 17.23      1.7

Office

    $ 21.89     $ 22.49      (2.7 %)     $ 22.05     $ 22.68      (2.8 %) 

Total

    $ 15.03     $ 14.83      1.3    $ 14.90     $ 14.79      0.7

 

 

(1)

Refer to page 27, Definitions and Non-GAAP Disclosures, for the definitions of Same Park, Revenue per Occupied Square Foot and Revenue per Available Square Foot.

(2)

Included in the calculation of revenue per occupied square foot and RevPAF is (a) lease buyout income of $0.3 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.8 million and $1.1 million for the nine months ended September 30, 2020 and 2019, respectively, (b) accounts receivable write-offs of $0.2 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively, and $1.4 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively, and (c) deferred rent receivable write-offs of $0.3 million and $0.1 million for the three months ended September 30, 2020 and 2019, respectively, and $2.6 million and $0.4 million for the nine months ended September 30, 2020 and 2019, respectively.

 

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Rentable Square Footage of Same Park Properties by Product Type as of September 30, 2020  

 

Markets                                     

       Industrial         Flex         Office         Total         % of Total      
          

Northern Virginia

     507     1,440     1,970     3,917     15.3

South Florida

     3,728     126     12     3,866     15.1

Silicon Valley

     3,094     367     -       3,461     13.5

East Bay

     3,297     53     -       3,350     13.1

Dallas

     1,300     1,587     -       2,887     11.2

Austin

     755     1,208     -       1,963     7.6

Los Angeles County

     1,256     317     31     1,604     6.2

Seattle

     1,052     270     28     1,350     5.3

Suburban Maryland

     394     -       751     1,145     4.5

Orange County

     810     101     -       911     3.5

San Diego County

     233     535     -       768     3.0

Mid-Peninsula

     -       94     340     434     1.7

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     16,426     6,098     3,132     25,656     100.0

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Percentage by Product Type

     64.0     23.8     12.2     100.0  
          
Same Park Weighted Average Occupancy Rates by Product Type for the Three Months Ended September 30, 2020  

    

          

Markets

             Industrial         Flex         Office         Total  

    

                                   

Northern Virginia

       95.2%       95.9%       89.9%       92.8%  

South Florida

       93.2%       80.0%       100.0%       92.8%  

Silicon Valley

       96.4%       90.2%       -       95.7%  

East Bay

       88.0%       90.2%       -       88.0%  

Dallas

       90.4%       86.1%       -       88.0%  

Austin

       94.5%       94.4%       -       94.5%  

Los Angeles County

       95.6%       93.1%       99.1%       95.2%  

Seattle

       93.8%       97.5%       60.8%       93.8%  

Suburban Maryland

       83.5%       -       92.6%       89.5%  

Orange County

       92.3%       95.4%       -       92.6%  

San Diego County

       98.4%       95.4%       -       96.3%  

Mid-Peninsula

       -       88.0%       91.2%       90.5%  

Total

       92.7%       92.1%       90.6%       92.3%  
          
Same Park Weighted Average Occupancy Rates by Product Type for the Nine Months Ended September 30, 2020  

    

          

Markets

             Industrial         Flex         Office         Total  
          

Northern Virginia

       94.4%       94.8%       90.5%       92.6%  

South Florida

       93.3%       84.3%       100.0%       93.1%  

Silicon Valley

       96.4%       90.5%       -       95.8%  

East Bay

       86.7%       92.4%       -       86.8%  

Dallas

       91.8%       87.3%       -       89.3%  

Austin

       95.6%       94.1%       -       94.6%  

Los Angeles County

       95.2%       95.8%       99.1%       95.4%  

Seattle

       97.0%       97.0%       81.9%       96.7%  

Suburban Maryland

       83.4%       -       93.5%       90.0%  

Orange County

       93.0%       93.1%       -       93.0%  

San Diego County

       97.4%       95.6%       -       96.1%  

Mid-Peninsula

       -       86.8%       93.2%       91.8%  

Total

       92.8%       92.3%       91.5%       92.5%  

 

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Rentable Square Footage of Same Park Properties by Size as of September 30, 2020 (1)  

    

            

Markets                                         

                 Large Tenant         Small Tenant                 Total          
            

Northern Virginia

           2,479     1,438     3,917

South Florida

                    3,107     759     3,866

Silicon Valley

           2,835     626     3,461

East Bay

           3,052     298     3,350

Dallas

           1,758     1,129     2,887

Austin

                                                         1,718     245     1,963

Los Angeles County

           712     892     1,604

Seattle

           951     399     1,350

Suburban Maryland

           537     608     1,145

Orange County

           513     398     911

San Diego County

           -       768     768

Mid-Peninsula

           -       434     434

 

        

 

 

   

 

 

   

 

 

 

Total

           17,662     7,994     25,656

 

        

 

 

   

 

 

   

 

 

 

Percentage by Size

           68.8     31.2     100.0
            
Same Park Weighted Average Occupancy Rates by Size for the Three Months Ended September 30, 2020 (1)  

    

 

Markets

                 Large Tenant         Small Tenant                 Total          
            

Northern Virginia

           91.7     94.6     92.8

South Florida

           92.5     94.0     92.8

Silicon Valley

           96.2     93.2     95.7

East Bay

           87.0     98.3     88.0

Dallas

           90.5     84.1     88.0

Austin

           95.2     89.6     94.5

Los Angeles County

           97.8     93.0     95.2

Seattle

           93.7     94.1     93.8

Suburban Maryland

           87.4     91.3     89.5

Orange County

           91.1     94.6     92.6

San Diego County

           -         96.3     96.3

Mid-Peninsula

                        -         90.5     90.5

Total

           92.2     92.4     92.3
            
Same Park Weighted Average Occupancy Rates by Size for the Nine Months Ended September 30, 2020 (1)  

    

 

Markets

                     Large Tenant             Small Tenant         Total  
            

Northern Virginia

           91.5     94.3     92.6

South Florida

           93.0     93.4     93.1

Silicon Valley

           96.3     93.3     95.8

East Bay

           85.7     98.7     86.8

Dallas

           91.6     85.7     89.3

Austin

           95.4     89.3     94.6

Los Angeles County

           97.5     93.8     95.4

Seattle

           97.0     95.9     96.7

Suburban Maryland

           89.4     90.5     90.0

Orange County

           92.1     94.2     93.0

San Diego County

           -         96.1     96.1

Mid-Peninsula

           -         91.8     91.8

Total

           92.4     92.7     92.5

 

 

(1)

The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

 

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Rentable Square Footage of Properties by Product Type as of September 30, 2020  

    

 

Markets

       Industrial         Flex         Office         Total         % of Total      
          

Northern Virginia

     1,564     1,440     1,970     4,974     18.1

South Florida

     3,728     126     12     3,866     14.1

Silicon Valley

     3,094     446     -       3,540     12.9

East Bay

     3,297     53     -       3,350     12.2

Dallas

     1,300     1,587     -       2,887     10.5

Los Angeles County

     1,946     317     31     2,294     8.3

Austin

     755     1,208     -       1,963     7.1

Seattle

     1,052     270     28     1,350     4.9

Suburban Maryland

     394     -       751     1,145     4.2

Orange County

     810     101     -       911     3.3

San Diego County

     233     535     -       768     2.8

Mid-Peninsula

     -       94     340     434     1.6

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     18,173     6,177     3,132     27,482     100.0

 

  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Percentage by Product Type

     66.1     22.5     11.4     100.0  
          
Weighted Average Occupancy Rates by Product Type for the Three Months Ended September 30, 2020  

    

 

Markets

             Industrial         Flex         Office         Total  

    

          

Northern Virginia

       93.5     95.9     89.9     92.8

South Florida

       93.2     80.0     100.0     92.8

Silicon Valley

       96.4     89.5     -         95.5

East Bay

       88.0     90.2     -         88.0

Dallas

       90.4     86.1     -         88.0

Los Angeles County

       80.0     93.1     99.1     82.1

Austin

       94.5     94.4     -         94.5

Seattle

       93.8     97.5     60.8     93.8

Suburban Maryland

       83.5     -         92.6     89.5

Orange County

       92.3     95.4     -         92.6

San Diego County

       98.4     95.4     -         96.3

Mid-Peninsula

       -         88.0     91.2     90.5

Total

       91.1     92.0     90.6     91.2

    

          

Weighted Average Occupancy Rates by Product Type for the Nine Months Ended September 30, 2020

 

    

 

Markets

             Industrial         Flex         Office         Total  

    

          

Northern Virginia

       91.7     94.8     90.5     92.1

South Florida

       93.3     84.3     100.0     93.1

Silicon Valley

       96.4     90.1     -         95.6

East Bay

       86.7     92.4     -         86.8

Dallas

       91.8     87.3     -         89.3

Los Angeles County

       87.5     95.8     99.1     88.8

Austin

       95.6     94.1     -         94.6

Seattle

       97.0     97.0     81.9     96.7

Suburban Maryland

       83.4     -         93.5     90.0

Orange County

       93.0     93.1     -         93.0

San Diego County

       97.4     95.6     -         96.1

Mid-Peninsula

       -         86.8     93.2     91.8

Total

       91.9     92.2     91.5     91.9

 

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Rentable Square Footage of Properties by Size as of September 30, 2020 (1)

 

    

 

Markets

               Large     Small             Total          
          

Northern Virginia

         3,399     1,575     4,974

South Florida

         3,107     759     3,866

Silicon Valley

                                                            2,835     705     3,540

East Bay

         3,052     298     3,350

Dallas

         1,758     1,129     2,887

Los Angeles County

         1,255     1,039     2,294

Austin

         1,718     245     1,963

Seattle

         951     399     1,350

Suburban Maryland

         537     608     1,145

Orange County

         513     398     911

San Diego County

         -         768     768

Mid-Peninsula

         -         434     434

 

      

 

 

   

 

 

   

 

 

 

Total

         19,125     8,357     27,482

 

      

 

 

   

 

 

   

 

 

 

Percentage by Size

         69.6     30.4     100.0
          

Weighted Average Occupancy Rates by Size for the Three Months Ended September 30, 2020 (1)

 

    

 

Markets

                   Large Tenant             Small Tenant                 Total          
          

Northern Virginia

         91.8     94.9     92.8

South Florida

         92.5     94.0     92.8

Silicon Valley

         96.2     92.4     95.5

East Bay

         87.0     98.3     88.0

Dallas

         90.5     84.1     88.0

Los Angeles County

         72.5     93.6     82.1

Austin

         95.2     89.6     94.5

Seattle

         93.7     94.1     93.8

Suburban Maryland

         87.4     91.3     89.5

Orange County

         91.1     94.6     92.6

San Diego County

         -            96.3     96.3

Mid-Peninsula

         -            90.5     90.5

Total

         90.7     92.6     91.2
          

Weighted Average Occupancy Rates by Size for the Nine Months Ended September 30, 2020 (1)

 

    

 

Markets

               Large Tenant         Small Tenant         Total  
          

Northern Virginia

         91.0     94.4     92.1

South Florida

         93.0     93.4     93.1

Silicon Valley

         96.3     92.8     95.6

East Bay

         85.7     98.7     86.8

Dallas

         91.6     85.7     89.3

Los Angeles County

         84.3     94.2     88.8

Austin

         95.4     89.3     94.6

Seattle

         97.0     95.9     96.7

Suburban Maryland

         89.4     90.5     90.0

Orange County

         92.1     94.2     93.0

San Diego County

         -            96.1     96.1

Mid-Peninsula

         -            91.8     91.8

Total

         91.6     92.8     91.9

 

 

(1)

The Company’s “large tenant” portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the “small tenant” portfolio consists of properties with average leases less than 5,000 square feet.

 

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Lease Expirations - Total Portfolio

 

            Annualized               % of Total Annualized    

Year of Lease Expiration

       Leased Square Footage          Rental Income (1)      % Total      Rental Income  
           

                2020

     1,458     $ 24,767       5.6%        5.6%  

                2021

     5,486       93,627       21.3%        21.3%  

                2022

     5,538       97,801       22.3%        22.3%  

                2023

     4,499       73,758       16.8%        16.8%  

                2024

     2,920       51,668       11.8%        11.8%  

            Thereafter

     5,521       97,800       22.2%        22.2%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     25,422     $                             439,421                   100.0%        100.0%  
  

 

 

    

 

 

    

 

 

    

 

 

 
           

Lease Expirations - Industrial

 

            Annualized      % of      % of Total Annualized  

Year of Lease Expiration

   Leased Square Footage      Rental Income (1)      Industrial      Rental Income  
           

                2020

     921     $ 12,393       5.0%        2.8%  

                2021

     3,426       49,384       19.9%        11.2%  

                2022

     3,449       50,361       20.3%        11.5%  

                2023

     3,228       45,726       18.5%        10.4%  

                2024

     1,941       29,343       11.8%        6.7%  

            Thereafter

     3,971       60,653       24.5%        13.8%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     16,936     $ 247,860       100.0%        56.4%  
  

 

 

    

 

 

    

 

 

    

 

 

 
           

Lease Expirations - Flex

 

            Annualized      % of      % of Total Annualized  

Year of Lease Expiration

   Leased Square Footage      Rental Income (1)      Flex      Rental Income  
           

                2020

     344     $ 6,450       5.5%        1.5%  

                2021

     1,435       28,454       24.4%        6.5%  

                2022

     1,459       29,998       25.8%        6.8%  

                2023

     735       14,368       12.3%        3.3%  

                2024

     635       13,265       11.4%        3.0%  

            Thereafter

     1,064       23,944       20.6%        5.4%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     5,672     $ 116,479       100.0%        26.5%  
  

 

 

    

 

 

    

 

 

    

 

 

 
           

Lease Expirations - Office

 

            Annualized      % of      % of Total Annualized  

Year of Lease Expiration

   Leased Square Footage      Rental Income (1)      Office      Rental Income  
           

                2020

     193     $ 5,924       7.9%        1.3%  

                2021

     625       15,789       21.0%        3.6%  

                2022

     630       17,442       23.2%        4.0%  

                2023

     536       13,664       18.2%        3.1%  

                2024

     344       9,060       12.1%        2.1%  

            Thereafter

     486       13,203       17.6%        3.0%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     2,814     $ 75,082       100.0%        17.1%  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(1)

Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

 

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Lease Expirations - Northern California  
            Annualized      % of        % of Total Annualized    

Year of Lease Expiration

       Leased Square Footage          Rental Income (1)      No. CA      Rental Income  
           

                2020

     324     $ 8,558       7.1%        2.0%  

                2021

     1,254       23,208       19.2%        5.3%  

                2022

     1,137       20,399       16.8%        4.6%  

                2023

     1,119       19,946       16.5%        4.6%  

                2024

     835       14,547       12.0%        3.3%  

            Thereafter

     2,049       34,417       28.4%        7.8%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     6,718     $                             121,075                   100.0%        27.6%  
  

 

 

    

 

 

    

 

 

    

 

 

 
                                     
Lease Expirations - Southern California  
            Annualized      % of        % of Total Annualized    

Year of Lease Expiration

       Leased Square Footage          Rental Income (1)      So. CA      Rental Income  
           

                2020

     251     $ 4,590       6.5%        1.0%  

                2021

     897       17,169       24.5%        3.9%  

                2022

     1,117       20,386       29.1%        4.7%  

                2023

     512       9,704       13.9%        2.2%  

                2024

     328       6,933       9.9%        1.6%  

            Thereafter

     662       11,251       16.1%        2.5%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     3,767     $ 70,033                   100.0%        15.9%  
  

 

 

    

 

 

    

 

 

    

 

 

 
                                     
Lease Expirations - Dallas  
            Annualized      % of        % of Total Annualized    

Year of Lease Expiration

       Leased Square Footage          Rental Income (1)      Dallas      Rental Income  
           

                2020

     172     $ 2,607       7.7%        0.6%  

                2021

     728       9,567       28.2%        2.2%  

                2022

     405       4,900       14.4%        1.1%  

                2023

     518       6,189       18.2%        1.4%  

                2024

     231       3,732       11.0%        0.9%  

            Thereafter

     435       6,963       20.5%        1.6%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     2,489     $ 33,958                   100.0%        7.8%  
  

 

 

    

 

 

    

 

 

    

 

 

 
                                     
Lease Expirations - Austin  
            Annualized      % of        % of Total Annualized    

Year of Lease Expiration

   Leased Square Footage      Rental Income (1)      Austin      Rental Income  
           

                2020

     36     $ 446       1.3%        0.1%  

                2021

     366       6,509       18.2%        1.5%  

                2022

     403       7,401       20.7%        1.7%  

                2023

     232       4,372       12.2%        1.0%  

                2024

     228       4,829       13.5%        1.1%  

            Thereafter

     618       12,169       34.1%        2.8%  
  

 

 

    

 

 

    

 

 

    

 

 

 

                Total

     1,883     $ 35,726       100.0%        8.2%  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(1)

Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

 

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Lease Expirations - Northern Virginia  
            Annualized      % of        % of Total Annualized    

Year of Lease Expiration

       Leased Square Footage          Rental Income (1)      No. VA      Rental Income  
           

                2020

     283     $ 4,481       4.8%        1.0%  

                2021

     954       17,855       19.4%        4.0%  

                2022

     1,251       26,429       28.7%        6.0%  

                2023

     613       12,228       13.3%        2.8%  

                2024

     532       10,606       11.5%        2.4%  

            Thereafter

     1,014       20,536       22.3%        4.7%